Identify Which of the Following Statements Is True

question 62

Multiple Choice

Identify which of the following statements is true.

• A)If the gifted property's FMV on the date of the gift exceeds its adjusted basis and the donor pays no gift tax,the donee's basis is the same as the donor's basis if the property is sold for a loss.
• B)Prospective donors should not dispose of property that has declined in value by selling it rather than gifting it.
• C)A $13,000 annual exclusion per donee is available for both gift tax and estate tax purposes.
• D)All of the above are false.

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Definitions:

Income

The financial gain received by an individual or entity, usually from work, investments, business ventures, or other sources.

Expected Utility Function

A mathematical representation that calculates the overall utility that an individual can attain, based on different outcomes and their respective probabilities.

Sure Payment

A guaranteed payment or financial transaction where the receiver has complete certainty of receiving the specified amount.

Lottery

A form of gambling involving the drawing of numbers for a prize, often used as a method to allocate scarce resources such as green cards or in decision theory as a risk model.